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8-K
GRAHAM HOLDINGS CO filed this Form 8-K on 02/23/2018
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costs at KHE were $1.8 million and $1.2 million for 2017 and the fourth quarter of 2017, respectively, compared to $7.2 million and $5.5 million for 2016 and the fourth quarter of 2016, respectively.
New higher education student enrollments at Kaplan University declined 4% in 2017 due to lower demand across Kaplan University programs. Total students at Kaplan University were 28,718 at December 31, 2017, down 11% from December 31, 2016.
Kaplan University higher education student enrollments by certificate and degree programs are as follows:
 
 
As of December 31
 
 
2017
 
2016
Certificate
 
9.5
%
 
7.7
%
Associate’s
 
16.5
%
 
18.1
%
Bachelor’s
 
50.9
%
 
50.9
%
Master’s
 
23.1
%
 
23.3
%
 
 
100.0
%
 
100.0
%
KTP includes Kaplan’s standardized test preparation and new economy skills training programs. KTP revenue declined 5% in 2017 and 3% for the fourth quarter of 2017. Enrollments, excluding the new economy skills training offerings, were up 4% in 2017; however, unit prices were generally lower. In comparison to 2016, KTP operating results improved in 2017 due primarily to operating cost efficiencies. Operating losses for the new economy skills training programs were $16.7 million and $13.0 million for 2017 and 2016, respectively, including restructuring costs incurred in connection with the closing of Dev Bootcamp that was completed in the second half of 2017. Dev Bootcamp made up the majority of KTP’s new economy skills training programs.
Kaplan International includes English-language programs and postsecondary education and professional training businesses largely outside the United States. Kaplan International revenue increased slightly in 2017, and on a constant currency basis, revenue increased 2%, primarily due to growth in Pathways enrollments. Revenue was up in the fourth quarter of 2017; however, on a constant currency basis, revenue decreased 1%, largely due to timing of class starts at Pathways in the fourth quarter of 2017. Kaplan International operating income increased 5% in 2017, due largely to improved Pathways program results, partially offset by a decline in Singapore. Operating income decreased 15% in the fourth quarter of 2017 largely due to timing of class starts at Pathways. Restructuring costs at Kaplan International totaled $3.8 million and $4.7 million in 2017 and 2016, respectively.
Kaplan corporate and other represents unallocated expenses of Kaplan, Inc.’s corporate office, other minor businesses and certain shared activities.
Television Broadcasting
On January 17, 2017, the Company closed on its agreement with Nexstar Broadcasting Group, Inc. and Media General, Inc. to acquire WCWJ, a CW affiliate television station in Jacksonville, FL, and WSLS, an NBC affiliate television station in Roanoke, VA, for $60 million in cash and the assumption of certain pension obligations. The Company continues to operate both stations under their current network affiliations.
Revenue at the television broadcasting division increased slightly to $409.9 million in 2017, from $409.7 million in 2016. Excluding revenue from the two newly acquired stations, revenue declined 6% due to a $28.7 million decrease in political advertising revenue, $13.1 million in 2016 incremental summer Olympics-related advertising revenue at the Company’s NBC affiliates, lower network revenue and the adverse impact from hurricanes Harvey and Irma in the third quarter of 2017, partially offset by $20.7 million in increased retransmission revenues. As previously disclosed, the Company’s NBC affiliates in Houston and Detroit are operating under a new contract with NBC effective January 1, 2017 that has resulted in a significant increase in network fees in 2017, compared to 2016. Operating income for 2017 was down 32% to $137.2 million, from $200.5 million in 2016 due to lower revenues, the significantly higher network fees and increased amortization of intangibles expense.
For the fourth quarter of 2017, revenue increased 2% to $111.0 million, from $108.8 million in 2016. Excluding revenue from the two newly acquired stations, revenue declined 4% due to a $15.3 million decrease in political advertising revenue and lower network revenue, partially offset by $5.9 million in higher retransmission revenues and an increase in advertising revenue in several key sectors. Operating income for the fourth quarter of 2017 was down 30% to $39.0 million, from $55.9 million in the same period of 2016, due to the significantly higher network fees and increased amortization of intangible assets expense.
Other Businesses
Manufacturing includes four businesses: Dekko, a manufacturer of electrical workspace solutions, architectural lighting and electrical components and assemblies; Joyce/Dayton Corp., a manufacturer of screw jacks and other linear motion systems; Forney, a supplier of products and systems that control and monitor combustion processes

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